1970/10/2870-575
City Hall,, An~Im, California - cOUNciL NII~rTES - October 28, 1970, ~,;30 P.H.
The City Council of the City of Anaheim met in Adjourned Regular
Session.
PRESENT: . COIRICTLI~N:
ABS~.~T:
PRESENT:
Clark, Stepheuson, Pebley, Thom and Dutton
COUNCIL~N: None
CITY NANACER: ~eith A. ~rdoch
CITY ATTORNEY: Joseph B. ~eisler
ASSISTANT CITY ATT(~,NEY: John Dawson
ASSISTAKT CITY ATTORNEY: Alan Watts
DEPUTY CITY CLERK: Alona H. Farrms
FINANCE DIRECTOR: Douglas Ogden
PARKS AND RECREATION DIRECTOR: John Collier
Hayor Dutton called the meeting to order.
WAIVER OFREADING- ORDINANCES AND RESOLUTIONSI Councilman Clark moved to waive
the reading 'in full of all ordinances and resolutions, and that consent to
the waiver of reading is hereby given by all Councilmen, unless after reading
of the title, specific request is made by a Councilman for the reading of such
ordinance or resolution. Councilman Pebley seconded the motion. HOTIONUNANI-
~USLY CARRIED.
REporT - FINANCIAL DEHANDS AGAINST THE CITY: Demands against the City, in the
o~t of $1,045,411.87, in accordance vith the 1970-71 Budget, were approved.
PURGHAS~ OF PROPERTY - GOLF COURSE AND PARK PUR~0SES - NALI~ CANyON-NOHL RANCH
AREAi The Deputy City Clerk introduced a petition purportedly containing 206 sig-
natures supporting the proposed new golf course.
Councilman Pebley requested that the Ntnutes show he had done busi-
ness w~th the Robert H. Grant Corporation for the past fourteen years and,
therefore, felt he should abstain from any action taken on the proposed pur-
chase of property in the Walnut Canyon-Nohl Ranch area for golf course and
park purposes. He added that ~e believed he legally could vote on this issue
because he has no personal interest in the Nohl Ranch acquisition and is not
a partner in any way with the Grant Corporation; however, because of his close
personal relationship vith RObert H. Grant and his business dealings with the
Grant Corporation he reiterated his intention to abstain on the issue and there-
upon left the Council table. (4:35 P.M..).
City Hanager Keith F~rdoch reported that subsequent to d~cussion of
the subject at the October 20, 1970 meetins he had prepared a su~aary recom-
mendationvhich he read in full to the Council, as follows, ~rlth some side com-
ment s:
"The City of Anaheim should enter into an Agreement of Sale vith the
Robert H. Grant Corporation to purchase this land. (Approximately 300.8 gross
acres.)
"The purchase of this land-w~ll be handled in two separate documents.
I rill first explain the details of the transaction covering the proposed golf
course land.
"The land for the proposed course is composed of 235.8 (~o hundred
thirty-five and eight tenths) gross acres. This land is a portion of the Nob1
Ranch generally knosm as the Walnut Canyon Area.
"The land was designated as an open space area on the City's Hill
and Canyon ~eneral Plan adopted on October 1, 1965. By purchasing the land
at this time, the City would be accomplishin~ this portion of its General Plan.
"This area was also chosen by the Citizens Capital Improvement Com-
mittee on Recreation and Culture as the prime site for a ch~?.tonship golf
course. They reco~nded that this course be built by 1970. By entering into
this agreement we ~ould also be acco~pltshing their reco~snendation.
70-576
City Hall, A~._aheim, California - COU~.C!L ~!~__8 - October 28, .1970, 4;30 P.M,
"A golf course is a very good way to retain and hold open
space and at the same time return a profit to the City.
'~he agreement in Article II calls for the City to purchase
the land for the course from Grant Corporation for'$2,300,O00.00 (two
million three hundred thousand, dollars). The purchase price would bear
interest at the rate of 6% (six.percent) on the unpaid balance per annum
until such time as thepurchase price is fully paid. The transaction
requires no do~n payment. Based upon the appraisal attached as Exhibit
A, this is a fair, Just and reasonable price for 235.8 (t~o hundred
thirty-five and eight tenths) gross acres of land in this area. The
current interest rate on Hoody rated AA bonds is 6% (six percent) and
the current prime interest rate at banks as of October 26, 1970 is 7.5%
(seven and one-half percent). This shows that the interest rate we are
getting is fair, Just and reasonable.
'Article II! spells out the terms for payment of the purchase
price. We ~ould make only interest payments until July 1, 1973. The
first interest payment would be due July 1, 1971 and would be the in-
terest for eight months or appr°ximately $92,000.00 (ninety twO thou-
sand dollars). On July 1', 1972, we would make our second interest pay-
ment of appr0ximately $138,000.00 (one hundred thirty-eight thousand
dollars). '
'Co~mencin$ July 1, 1973, we would make the first semi-annual
principal and interest payment of approximately $105,000.00 (one hundred
five thousand dollars). These payments would Continue for thirtY'Six
equal consecutive payments.
'In order to pay the installment payments, the City would set
up a Golf Course Revenue Fund. This fund would be separated into four
sub-accounts; the accounts ~ou'ld be Imovn as the Installment Account,
the Operations Account, the Construction Account, and the Reserve Ac-
count. The purpose and workings of these accounts are explained in
Article IV of the agreement. By setting up this account, the General
Fund of the City is not liable, nor is the existing taxing power of the
City pledged for the payment of the installment payments.
"This is covered in Article V of the agreement.
"The monies for the special fund would come from the operation
of the City's existing course and the proposed course. As shovm in the
attached Exhibit B, based upon the projected operating expenses at both
courses, and an increase in green fees of 50¢ (fifty cents), the City
wOuld be able to develop the new course and operate both courses with
a total cumulative outlay of $330,000.00 (three hundred thirty thousand
dollars) by 1974-75. Of this amount, $210,000.00 (two hundred ten thou-
sand dollars) would be invested funds to provide for one year's princi-
pal and interest payment and ~ould be returned to the Citywhen the
land has been fully paid for. Starting in 1975-76, the City could ex-
pect a net return of $160,000.00 (one hundred sixty thousand dollars)
per year so that by 1977-78 all monies advanced for the development
would have been recovered. From that point on, the operation of the
golf courses should produce a net annual return to the City of $160,000.
(one hundred sixty thousand dollars). This money could be transferred
each year from the Golf Course Fund to the General Fund of the City."
Hr. Hurdoch advised that, although hts memorandum indicates
all monies advanced for the development would be recovered by Fiscal
Year 1977-78, the $210,000.00 retained in the Riding Reserve meant the
golf course aetually~ould be paid for one year earlier.
Councilman Clark asked for verification that, under the pro-
posed a~reement, neither the General Fund nor the existinA tax pover of
the City vould be liable for any payments. Hr. Nurdoch assured him this
was correct.
70-577
City Hal!, Anaheim, California - COU1/CIL MINUTES - October 28, 1970, ~:30 P.M.
Councilman Clark requested a statement on what recourse the Grant
Corporation would have in the event the City fails to make a payment.
Mr. M~rdoch stated any recourse would have to come from the property
itself, and not the General Fund or the taxing authority.
Assistant City Attorney Alan Watts advised that essentially any re-
course would be contained within the confines of the proposed agreement, one
provision of which is that the City Council set golf course fees in an amount
sufficient to return the installment payments. He added that if there were
not sufficient persons golfing to bring in enough revenue for payments, and
the City had abided by all the terms of the proposed agreement, there would
be no recrouse, since the property could not be foreclosed against.
In answer to questioning by Councilman Clark, Mr. Watts advised that
the City Attorneys, Grant Corporation Attorneys, and O'Melveny and Myers, Bond
Attorneys, had redrafted the proposed agreement to insure the principle that
there was no other source other than the revenues of the two golf courses
which was essentially obliged to pay off this indebtedness.
Mr. Murdoch advised that as a monetary penalty, additional interest
would be due if there was insufficient money in any given year to make the due
payment. However, he added, it was almost an impossibility that this situa-
tion ever would occur.
"Because of the fairness of this agreement and the necessity to
act now when the Nohl Ranch is being sold, I recommend that the City enter
into this agreement. By the very nature of this agreement, enabling the
City to gain open space and at the same time construct a self-supporting
27 (twenty-seven) hole championship golf course, this agreement is advanta-
geous to the City at this time and for the future."
Mr. Fmrdoch explained that, although there is an obligation to
build the first 18 holes expeditiously, construction of the third 9-hole
course depended on the demand. However, he added, if the third 9-hole
course was not built as soon as anticipated it could have an effect on
the cash flow projection because there would be no income from it, although
building the course would mean there were construction costs to pay off.
"The second part of this purchase involves the purchase of 65
(sixty-five) acres of property for park purposes for a price of $550,000.00
(five hundred fifty thousand dollars). The park property would be located
as follows:
"(a) 25 (twenty-five) acres at Walnut Canyon Reservoir.
"(b) 23 (twenty-three) acres adjacent to the Orange Unified High
School site.
"(c) The remaining acreage at locations agreed upon by both par-
ties, and wherever possible adjacent to a school site.
"We would purchase the property from the Grant Corporation by pay-
ing $200,000.00 (two hundred thousand dollars) down during the 1971-72 fis-
cal year. The remainder of the purchase price would be paid for from devel-
opment fees to be collected as development occurs in areas serviced by the
parks."
Mr. Murdoch advised that for quite some time the City had attempted
to acquire park properties before the pressure of development was on the area,
for the following reasonS: The property could be purchased at a better price
sifice development increases land costs in an area; an arrangement could be
worked out to not pay all the costs in cash. He added that this is one of
the few times the City has been able to tentatively work out such an agree-
ment, subject to Council approval.
70-578
City Hall, Anaheim, California - COUI~CIL ~!__WffI2S - October 28, 1970, .4:30 P.M.
Hr. Fmrdoch stated he believed the proposed park site purchase
is an excellent way to obtain property in areas that uti11 develop in
the future because the burden of payment for those park sites is put on
those properties that will be serve~ as they develop. Thus, in this
case, the City is allowed to.put a down-payment on the property at
day's price and have the remainder paid out of development fees.
}ir. ~hrdoch advised that the $200,000.00 down-payment required
for the park sites purchase is somewhat less than what has been spent
in most of the recent fiscal years for park site acquisition.
"The agreement covering the purchase of the park lands also
calls for the Grant Corporation to install $350,000.00 (three hundred
fifty thousand dollars) worth of recreational facilities in the area.
"Part of the facilities would include $100,000.00 (one hundred
thousand dollars) worth of public swimming, tennis and other recreational
facilities.
"The remaining $250,000.00 (two hundred fifty thousand dol-
lars) would be either paid to the City for a golf course clubhouse or
the Grant Corporation will build a clubhouse with a minimum value of
9250,000.00 (two hundred fifty thousand dollars).
"This would reduce the City's net purchase price of the 300.8
(three hundred and eight-tenths) gross acres of land to $2,500,000.00
(two million and five hundred thousand dollars). This amounts to ap-
proximately $8,333.00 (eight thousand three hundred and thirty-three
dollars) per acre.
"This total package is a very fair, just and reasonable agree-
ment. Because of the necessity of the City to acquire park lands and
open space so that it may be preserved for the future, I again recom-
mend that the City enter into these agreements with the Grant Corpora-
tion.'
Councilman Dutton, referring to Hr. Fairdoch's statement about
preserving park lands and open spaces, cited the recent conversion to
shopping and housing developments of 33 private golf courses in metro-
politan New York, 18 in Chicago, and 9 in Los Angeles, and sta~ed the
proposed purchase of land, in his opinion, would allow the City of Ana-
heim to protect a green belt area that would pay its own way, and thus
the City would not have to seek Federal funds to preserve a green belt,
as is done in many instances.
Councilman Clark agreed with Hr. Dutton's statement and said
he believed this proposed purchase was something not to be passed up,in
view of the assurance by the City ~t~nager and City Attorney that no funds
are involved other than the revenue generated from the courses themselves.
Hr. Dutton added that even though the City would like to ac-
complish what the proposed agreement covers, it could not be accomplished
without such an arrangement.
Council~an Stephenson expressed the opinion that if the City
did not put a golf course in the proposed location, homes probably would
be built on that site right below the Dam, a situation to be avoided in
the'remote possibility the Dam could break some day. Councilman Stephen-
son recalled that a few years prior the City was contemplating paying
$10,000.00 an acre for golf course property that was not as good as the
subject property, which property will cost approximately $8,333.00 an
acre, and thus he believed the proposed transaction was a good one.
70-579
City Hall, A~aheim, California - COUNCIL MINUTES - October .28, 1970, 4:30 P.M.
Mr. Fmrdoch stated that, although the proposed agreement, in his
opinion, is favorable to the City, by the City constructing a golf course
at that location Grant Corporation would also benefit by the increased val-
ue tQ their surrounding land.
Mr. Murdoch commended the City Attorneys for the excellent job they
had done in securing the proposed agreement, and stated that although the
agreement was cumbersome, it was necessarily so to provide the various safe-
guards the City Council required. He added that although the idea for the
agreement was taken from the City of Rtverside's acquisition of a private
water company, to his knowledge, this would be the first time an agreement
as drawn up for subject proposal had been used~ although the same principle
was used at the time purchase of property on the north side of the River was
contemplated a few years ago.
He advised that a requirement of the agreement is an opinion by
O'M~lveny and Myers that the agreement is in fact a proper legal document
and does provide to the seller a tax-exempt feature on the interest received
from the City.
Councilman Clark, recalling that the mineral rights were not re-
tained by the City in the first draft of the proposed agreement, requested ·
a review o~ the amendments to the agreement as contained in the Waiver Modi-
fying Agreement of Sale, and any changes in the final agreement draft.
Mr. Watts advised the major amendments were to assure that the ob-
ligation of the City was definitely limited to the Special Fund to be set up,
a criteria that had to be present in order to get the required opinion from
O'lielveny and Myers, and that the mineral rights were to be retained by the
City.
Mr. Murdoch advised that his review of the original draft agreement
and the final version showed the changes were consistent with the protections
required by the City Council and, although some changes indicated a slightly
different method of handling the transaction, the differences were well within
the ability of the City to handle and even, in some instances, made it easier
to handle administratively. He stated that one of the changes required daily
deposits in the special fund ~f all golf course revenues, a procedure that
always had' been in effect for the present golf course, although not normally
deposited in a special fund; another amendment was that the Grant Corporation
would provide additional funds for a clubhouse.'
Councilman Clark asked why there Was a deadline date of October 31,
1970, for completing this transaction, since he would have preferred more time
to study the proposition.
Mr. M~rdoch advised the October 31 deadline date had been set because
the Grant Corporation wanted to be sure this transaction was a part of the busi-
ness of their present fiscal year, which ends October 31, 1970, since they plan
to merge with another firm; also, however, it was economically important to the
City that the transaction be completed within our fiscal year to make certain
the payments were falling in the appropriate fiscal years.
Councilman Clark stated that, before voting for such a proposal, he
wanted to be sure the research was as thorough and complete as could have been
done with two or three weeks additional time for investigation. He requested
a statement from City Attorney Joseph B. Geisler on the matter.
Mr. Geisler was of the opinion that, without question, both the docu-
mentation and the negotiations were in the very best interests of the City, and
that further studies would not produce a more favorable proposal.
Councilman Clark asked for reassurance that it would be impossible
at any time for any funds other than the revenues created from the proposed
and existing golf courses to be ~sed in any of the costs incurred by the pro-
posed transaction.
Mr. Geisler advised that the City is bound by the proposed agree-
ment only to make payments out of the Special Fund that would be set up;
70-580
City Hall, Anaheim, California - COUNCIL .w[NUTES - October 28, 1970,. 4:30 P.M.
however, if at some time a bond issue was approved for park purposes,
that money could be used tO pay off the purchase, or payments out of
other available revenues could be made at any time the Council wished.
Councilman Clark stated hehad wanted to be sure there was no
commitment of any taxpayers funds other than revenues generated by per-
sons playing golf.
Mr. F~rdoch advised that revenues could be utilized chat might
be obtained from sources other than the golfers themselves, but all such
funds would have to be derived from the g°lf Course proPerties, such as
concessions.
ORDINANCE NO. 2864: CouncilmanStephenson offered Ordinance No. 2864
for adoption.
Refer to Ordinance Book.
AN ORDINANCE OF THE CITY OF ANAHEIM FOR THE CREATION OF A SELF-SUPPOTING
DIVISION OF GOLF COURSES AND A SPECIAL REVENUE FUND AND APPROVAL OF AC-
QUISITION OF LAND FOR A NEW GOLF COURSE.
Roll Call Vote:
AYES: COUNCILMEN: Clark, Stephenson and Dutton
NOE S: COUNCILMEN: Thom
ABSTAINED: COUNCILMEN: Pebley
ABSENT: COUNCILMEN: None
The Mayor declared Ordinance No. 2864 duly passed and adopted.
RESOLUTION NO. 70R-521: Councilman DutCon offered Resolution No. 70R-
521 for adoption.
Refer to Resolution Book.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM APPROVING THE
TERMS AND CONDITIONS OF AND AUTHORIZING THE MAYOR AND CITY CLERK TO
EXECUTE A WAIVER MODIFYING AGREEMENT OF SALE.
Roll Call Vote:
AYES: COUNCILMEN: Clark, Stephenson and Dutton
NOES: COUNCILMEN: Thom
ABSTAINED: COUNCILMEN: Pebley
ABSENT: COUNCILMEN: None
The Mayor declared Resolution No. 70R-521 duly passed and
adopted.
NOTION: On motion by Councilman DutCon, seconded by Councilman Stephen-
son, offer letter of Robert H. Grant Corporation, dated October 27, 1970,
regarding proposals in connectionwtth the park property purchase was ac-
cepted, and the Staff was instructed to draft necessary documents in ac-
cordance with the proposals contained in said letter. Councilman Thom
voted "No," Councilman Pebley abstained. MOTION CARRIED.
RESOLUTION NO, 70R-522; Councilman Stephenson offered Resolution No. 70R-
522 for adoption, approving the terms and conditions of Letter A~reement
dated October 23, 1970, employing O'Melveny and Myers as Special Counsel,
to render certain opinions, the costs thereof to be divided equally be-
tween the City and the Grant Corporation.
Refer to Resolution Book.
70-581
City Hall, Anaheim, California - COUNCIL MINUTES - October 28, 197.0, 4:30 P.M.
A RESOLUTION OF THE CITY COUNCIL OFT HE CITY OF ANAHEIM EMPLOYING THE LAW
FIRM OF O'MELVENY & MYERS AS SPECIAL COUNSEL CONCERNINGTHE ACQUISITION
OF REAL PROPERTY FROM THE ROBERT H. GRANT CORPORATION FOR THE PURPOSE OF
CONSTRUCTING A GOLF COURSE.
Roll Call Vote:
AYES: COUNCILMEN:
NOES: COUNCILMEN:
AB STAINED: COUNCILMEN:
ABSENT: COUNCILMEN:
Clark, Stephenson and DUtton
Thom'
Pebley
None
The Mayor declared Resolution NO. 70R-522 duly passed and adopted.
RESOLUTION NO. 70R-523: Councilman Stephenson offered Resolution No. 70R-
523 for adoption.
Refer to Resolution Book.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM ACCEPTING A GRANT
DEED FROM ROBERT H. GRANT CORPORATION.
Roll Call Vote:
AYES:
NOES:
ABSTAINED:
AB SENT:
COUNCILMEN:
COUNCILMEN:
C OUNC IL MEN:
COUNCILMEN:
Clark, Stephenson and Dutton
Thom
Pebley
None
The Mayor declare~ Resolution No. 70R-523 duly passed and adopted.
MOTION: On motion by Councilman Dutton, seconded by Councilman Stephenson,
First American Title Insurance Company was authorized to record the grant deed
from the Robert H. Grant Corporation, describing the 235.8 acres of property
intended for the proposed golf course and,further authorizing payment of any
fees in connection with said recordation. Councilman Thom voted "No," Coun-
cilman Pebley abstained. MOTION CARRIED.
Mr. Watts advised that the bond attorneys, O'Melveny and Myers,
had furnished no-conflict-of-interest statements that the Councilmen and
City officials would be required to execute for the files regarding the pro-
posed transaction.
Councilman Pebley returned to the Council table and introduced Mr.
Robert H. Grant to members of the Council, Department Heads, and the audience.
(5:30 P.M.).
HALLOWEF~FESTIVAL TEEN DANCE~ Request of the Anaheim Ch-mher of Con~nerce, Hallo-
ween Festival Division, for permission to conduct a dancefor Anaheim junior
and senior high school students at the La Palma Stadium, from 10:00 P.M. to
12:30 midnight, Saturday, October 31, 1970,.as part of the 47th Annual Hal-
loween Festival was approved, subject to the recommendations of Police Chief
Michel and the employment of additional police personnel as he may designate,
on motion by Councilman Clark, seconded by Councilman Thom. MOTION CARRIED.
CONVENTION CENTER PA~ING FEE - REPUBL!CANPARTYRALLY: The City Manager reported
a request from the Republican Party Central Co~nittee for permission to
crease the Convention Center parking fee from 50¢ to $1.00 for their sched-
uled event at the Convention Center, Friday evening, October 30, 1970, the
additional parking fee to be retained by the Republican Party.
Councilman Clark moved the request be granted. Motion did not re-
ceive a second.
Mr. Murdoch advised that, since other events than the Republican
Party activity were scheduled for the Convention Center for that same even-
ing, it would be very difficult to collect extra parking fees from only
those persons attending the Republican Party event.
On motion by Councilman Thom, seconded by Councilman Stephenson,
said request was denied. I~3TION CARRIED.
70- 582
City Hall, Anaheim, California - COUNCIL MINUTES - October 28, 1970, 4:30 P.M.
PQLICE SECURITY - V,I,P,; Mr, F~rd°ch suggested the City's poliCy of provid-
ing. police security for Convention Center Activities be re-analyzed af-
ter the Republican. Party activity, especially where distinguished visi-
tors are concerned,
RECI~SI~ICATION NO. 69-70-48 AND TENTATIVE TRACT NO. 5053: On motion by
Councilman Stephenson, seconded by Councilman Pebley, partial satisfac-
tion of conditions to Offer of Dedication of that portion of Alameda
Avenue which is adjacent to the easterly 1,014.23 feet of Lot A, Tract
5053 (Yellis property) was approved as to form and recordation authori-
zed. MDTIONCARRIED.
CQRRES~0NDENCE; On motion by Councilman Pebley, seconded by Councilman Thom,
correspondence from the California Water Resources Association, received
October 28, 1970, urging active support of Proposition No. 1 and Proposi-
tion No. 20 on the November 3, 1970 General Election Ballot was ordered
received and filed. MOTION CARRIED.
AILIO~: Councilman Clark moved to adjourn. Councilman Thom seconded the
motion. MOTION CARRIED.
ADJOURNED: 5:40 P.M.
Signed
Deputy City Clerk